Semiconductors are the backbone of modernity. Naturally, India would not want to be left behind. Soon, India is going to be a semiconductor giant. Let’s look at the development in this sector and how PM Modi is changing India’s technological growth story.
Home grown semiconductors soon going to be reality
According to various reports available in the public domain, companies have geared up to make India a semiconductor powerhouse. TATA Motors, the largest electric vehicle producer in India has joined hands with Renesas Electronics, a Japanese chip maker to design and develop semiconductor solutions. Moreover, both companies are also chalking out the modalities for collaboration in 5G and automotive services such as advanced-driver assistance systems (ADAS). TATA is also working towards developing outsourced semiconductor assembly and test (OSAT) plant in Telangana (india). The OSAT plant transforms silicon wafers into semiconductor chips.
Not just TATA, but other companies are also optimistic about the future of semiconductor manufacturing of India. Vedanta Group recently said that it has reached to advance stage of its semiconductor business. Its joint venture with Foxconn is expected to earn $3-3.5 billion in total turnover. The icing on the cake is that out of the aforementioned turnover, nearly 33 pe rcent will come from exporting made-in-India chips. Even foreign firms are now investing in India’s semiconductor potential. Dubai-based Next Orbit and Israeli tech firm Tower Semiconductor have formed a consortium named ISMC. It has already signed a deal with Karnataka government to set up a plant in Mysuru. The final approval from the government of India is still awaited as there are technical complexities involved.
Necessity driven Aatmanirbharta
Like every other innovation, India’s semiconductor push is also driven by necessity. Earlier India was largely dependent on imports of semiconductors chips for driving smart phones, radios, TVs, laptops, computers or even advanced medical equipment. The imports mainly came from countries like the USA, Taiwan, South Korea, Japan and the Netherlands. Among these suppliers, the USA and China were at the trade war, mainly around originality of the manufactured chip produced in China. The trade war hampered supply in pre-pandemic era.
Then came the pandemic to give final jolt. For a brief period, it felt as if supply-chain crisis would crush the technological growth. India was also hampered by it. It quickly decided to go Aatmanirbhar. Up until now, incentives worth Rs 2,30,000 crores have been provided to the sector. The biggest of them is Rs 76,000 crore worth of PLI scheme. As soon as the government announced PLI scheme for semiconductors, it received offers worth Rs 1.53 lakh crores to set up semiconductor and display plants. The Aforementioned 3 joint ventures were chosen to drive semiconductor journey of India.
Can’t rely on others
Even to this day, India largely relies on imports of semiconductors. But, our needs are going to exacerbate in upcoming years. EV and 5G push are two of the big revolutions requiring semiconductors. It is estimated that by 2026, semiconductor industry of India would have grown up to $64 billion.
In the wake of this kind of growth, we can’t rely on semiconductor imports from outside. There is an imminent need for Aatmanirbharta. Changes are appearing onto the scene, but there are miles to go for ending the dominance of erstwhile hegemons.
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